Clubs recovered to pre-COVID total income of almost €5B
LaLiga has presented its annual Financial Report for the 2021/22 season, in which Spanish professional football practically recovered to pre-pandemic figures in terms of revenue. Spanish clubs registered the lowest aggregate losses among Europe’s five major leagues, showing the success and robustness of a model based on financial sustainability.
Total income stood at €4.838 billion, matching the all-time record set in 2019/20. This comes after a significant drop during the pandemic-stricken 2020/21 season, which reduced saw total income drop to below €4 billion, with the new figure representing a 22.6% increase in year-on-year growth.
Of this total income, matchday revenue experienced the greatest growth (+123%), as a result of the widespread return of crowds to stadiums and the lifting of capacity restrictions during the first part of the season. There was also a remarkable increase in commercial revenues (+2.9%) against a difficult economic backdrop, recovering part of the previous year's loss of revenues as a result of the pandemic.
These total income figures see LaLiga regain second place among Europe’s major leagues, both in absolute and relative terms (measuring per capita income and at equal price levels). The recovery of the top position in relative terms will occur naturally over the next few seasons, when pre-COVID activity in the player transfer market, which has been slightly more subdued in Spain, is resumed.
In terms of total expenses, the cost of sports staff continues to be the largest expense at 47%, although the weight of salary costs in relation to Net Turnover (NT) has fallen from 81.2% to 75.1%, and in terms of total income from 61.4% to 54.5%, which demonstrates the effort that clubs are making to contain costs in order to optimise their operational efficiency and improve their financial situation.
The clubs’ determination to control expenses together with LaLiga's rigorous economic controls have played a decisive role in offsetting the immediate effects of the COVID-19 pandemic and creating the conditions for a gradual, lasting, and self-sustaining recovery.
The aggregate net incomeacross LaLiga was still a loss (-€140.1 million) in 2021/22, but with a lower level of deficit than in the previous season and when compared to the other major leagues. The German Bundesliga suffered a €205 million loss; the LFP in France a €601 million loss, while the Premier League & Championship in England lost around €1.005 billion, and Serie A & B in Italy registered a loss of around €1.150 billion.
The data confirms the sustainable model of LaLiga and the Bundesliga, in contrast to other models based on the absence of adequate economic controls and on constant club losses. These other models are sustained by systematic and huge contributions from their shareholders, which leads to undeniable financial doping that negatively impacts the rules of fair play and distorts competitions.
LaLiga’s aggregate EBITDA (earnings before interest, taxes, depreciation, and amortization, both before and after the results of player transfers, was again positive (€23.9 million and €280.8 million, respectively). This is a significant improvement, but still far from the annual records achieved before the pandemic.
It is important to highlight that the long-term negative effects of the health crisis will take a few years to be completely overcome, a situation shared by all leading European competitions, although LaLiga's overall situation is particularly favourable in comparative terms.
The evolution of transfer market activity is probably the clearest indicator of this situation. Lower activity in the player market is having a strong impact on the sale price of transfers (player exits), but the ‘automatic stabilisers’ activated by LaLiga are enabling the adjustment to be made to a large extent through the matching of purchase prices for transfers (player acquisitions), effectively protecting the balance sheet and the financial situation of clubs.
This favourable performance has also allowed the competition's aggregate organic operating cash flow (before net infrastructure investment) to turn positive again, at €104.3 million, and for the first time since the 2018/19 season. As a result, net borrowing has barely grown since the previous year, only +0.8%, standing at €2.102 billion (this balance includes the resources associated with the LaLiga’s ‘Boost LaLiga’ plan, which are in fact 50-year subordinated debt of the clubs, i.e. their own funds).
It should also be highlighted that the aggregate positive EBITDA and organic operating cash flow records do not take into account the hundreds of millions in profits and extraordinary financial resources obtained by Real Madrid CF and FC Barcelona as a consequence of their corporate asset monetisation operations (i.e. sale of future rights).
Total Net Investment increased again thanks to higher investments in infrastructure, with major developments in stadiums and training facilities. Further growth is expected as investments from the Boost LaLiga plan and other significant renovations such as the Spotify Camp Nou and Estadio Santiago Bernabeu take place.
LaLiga’s ‘Boost LaLiga’ is a strategic project with great transformational power, providing long-term funding to clubs and aimed at making targeted investments. It is very important to underline that, contrary to what has often been claimed, the main objective of this operation is not to offset the immediate effects of the pandemic, but instead to create the conditions for the future and lasting growth, both structural and economic, of Spanish football.
In terms of forecasts for the current 2022/23 season, revenue is estimated to continue growing and, most importantly, for aggregate positive net results to return once again to professional Spanish football.